How to manage leave and build employee engagement

Leave and employee engagement

Nally has been surveying each cohort of his postgraduate students as part of a longitudinal study of career anchors. His survey explores the things people consider non-negotiable in their jobs. These were originally identified by Edgar Schein in the 1970s during his time as a professor at the MIT Sloan School of Management.

“There are eight of them ranging from security to lifestyle,” Nally says. “I found that while baby boomers tend to have an equal distribution across all of them, 40 per cent of Generation Y put lifestyle first.

"In general, younger people don’t live to work, they work to live and, if business owners don’t understand this, there could be a great deal of tension when it comes to arranging leave.”

Nally cites an example of a young woman who wanted to spend six weeks in South America. “She had gone to great lengths to ensure her work would be covered while she was away, but her boss refused,” Nally says.

“When he told her that her only option was to resign, she did so reluctantly. She sought advice and, because the employer was found to have been unreasonable, he ended up paying out her leave entitlement, four weeks’ notice and another four weeks’ pay as compensation. A little more flexibility would have saved a lot of angst and expense.”

Benefits of taking time out

When it comes to leave, employee rights can work in both directions. Staff taking too little time off can negatively affect business growth as their productivity can wane.

“It’s very important that employees take the time off they’re entitled to so they have a chance to relax and unwind,” Nally says. “A holiday can help to prevent burnout, and there’s evidence that regular breaks from work have a positive impact on both mental and physical health.”

Big leave balances can also be very expensive for business. This is because, when it’s taken or paid out, employer regulations mean it has to be at the current rate of pay.

“If the leave has accrued over a number of years, this could add up to a significant extra cost,” Nally says. “Untaken annual leave is also recorded as a liability on your balance sheet."

“You need to encourage your team to take the leave they’re entitled to when it’s due in a way that has a minimal impact on the business. It won’t always be simple, but most issues can be resolved by being transparent about your needs and willing to consider a compromise.”